WTI up while stockpiles are down

West Texas Intermediate oil (NYMEX:CLQ14) rose on speculation a government report will show U.S. crude inventories dropped last week and as the country’s economy rebounded more than forecast in the second quarter.

Crude supplies probably fell for a fifth week, a Bloomberg survey showed before Energy Information Administration data today. Stockpiles declined 4.4 million barrels in the week ended July 25, the industry-funded American Petroleum Institute was said to have reported yesterday. Gross domestic product rose at a 4 percent annualized rate after shrinking 2.1 percent from January through March, Commerce Department figures showed today.

“We’re moving on storage expectations,” said Bob Yawger, director of the futures division at Mizuho Securities USA Inc. in New York. “Yesterday’s crude number was large and if today’s is anywhere near as big the market should move even higher.”

WTI for September delivery advanced 51 cents, or 0.5 percent, to $101.48 a barrel at 9:20 a.m. on the New York Mercantile Exchange. The contract slid 70 cents to $100.97 yesterday, the lowest close since July 15. The volume of all futures traded was 21 percent below the 100-day average.

Brent (NYMEX:SCQ14) for September settlement slipped 1 cent to $107.71 a barrel on the London-based ICE Futures Europe exchange. Volume was 41 percent lower than the 100-day average. The European benchmark crude traded at a $6.24 premium to WTI on ICE. The spread closed at $6.75 yesterday, the widest since July 4.

Inventory estimates

U.S. crude inventories probably fell 1.25 million barrels to 369.8 million last week, according to the median of 10 analyst responses in the Bloomberg survey.

Crude stockpiles dropped 914,000 barrels at Cushing, Oklahoma, the delivery point for WTI traded in New York, in the week ended July 25, the API was said to report.

The EIA will probably report that gasoline inventories rose by 1 million barrels last week, to the highest level since March, according to the Bloomberg survey.

The Washington-based API collects information on a voluntary basis from operators of refineries, bulk terminals and pipelines. The government requires that reports be filed with the EIA, the Energy Department’s statistical arm.

Gains in consumer spending and business investment helped bolster the U.S. economy in the last quarter following a slump in the prior three months that was smaller than previously estimated.

GDP forecast

The median forecast of 80 economists surveyed by Bloomberg called for a 3 percent advance. Consumer spending, the biggest part of the economy, rose 2.5 percent, reflecting the biggest gain in purchases of durable goods such as autos in almost five years. The first-quarter reading was revised up from a previously reported 2.9 percent drop.

“The U.S. economic data is a positive signal,” Yawger said. “It could be a sign of increased demand.”

The European Union agreed yesterday to bar state-owned Russian banks from selling shares or bonds in Europe, restricting the export of equipment to modernize the oil industry and barring the sale of equipment with military uses. The allies were moved to act after pro-Russian separatists continued to impede an investigation into the July 17 downing of a Malaysian airliner by a surface-to-air missile over eastern Ukraine.

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